Strategy shareholders approve daily dividends on 4 preferreds

Strategy shareholders have approved changes that let the company's four preferred stocks earn dividends every calendar day, with 99.3% of votes cast in favour, according to preliminary results. The amendment covers STRF, STRC, STRK and STRD, the perpetual preferred shares the bitcoin treasury company uses to fund part of its BTC buying, Decrypt reports.

What changes

• Accrual: dividends will accrue for every calendar day, including weekends and holidays, instead of on semi-monthly or quarterly schedules.
• Same rates: the annual dividend rates stay as they are, between 8% and 12%. STRC carries a variable rate, currently 12%; the other three are fixed, and STRK can also be converted into Strategy common stock, according to Cointelegraph.
• Weekends: dividends with record dates on weekends or holidays are bundled and paid on the next business day, an SEC filing shows.

Timeline

• STRC: first daily record date Nov. 1, first payment Nov. 2.
• STRF, STRK, STRD: switch over on Jan. 1, 2027, with daily payments expected to start on Jan. 4.

Strategy says paying dividends sooner after they are earned should support liquidity and price stability in the preferred shares. We covered the original proposal when Strategy declared daily STRC dividends for November.

Why it matters

Preferred stock has become a main funding line for bitcoin treasury firms, and it comes with a cash bill that grows with every issue. As we noted in our analysis of preferred dividends versus bitcoin buys, money paid out to preferred holders is money not spent on BTC.

Strategy is not the first to pay daily. Rival Strive introduced daily cash dividends on its SATA preferred in June and plans daily payments on its newer SATS shares, which carry a fixed 15% rate, from Nov. 9, subject to declaration. Strive closed a $630 million SATS offering on Oct. 20.

Strategy remains the largest listed corporate bitcoin holder with 848,517 BTC, while Strive ranks fourth with about 43,000 BTC, according to BitcoinTreasuries.net. New to the model? Our explainer on what a bitcoin treasury company is covers mNAV, dilution and the main risks.